TRACON Pharmaceuticals Inc’s (NASDAQ:TCON): TRACON Pharmaceuticals, Inc., a clinical stage biopharmaceutical company, focuses on the development and commercialization of therapeutics for cancer, wet age-related macular degeneration (AMD), and fibrotic diseases. The US$38.09M market-cap company’s loss lessens since it announced a -US$27.01M bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$18.86M, as it approaches breakeven. The most pressing concern for investors is TCON’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for TCON.
TCON is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2020, before turning a profit of US$28.26M in 2021. Therefore, TCON is expected to breakeven roughly 3 years from now. How fast will TCON have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 16.92% year-on-year, on average, which seems relatively fair. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into detail the detail of TCON’s upcoming projects, though, take into account that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means a double-digit growth rate is not unusual, especially if the company is currently in an investment period.
One thing I’d like to point out is that TCON has managed its capital prudently, with debt making up 33.57% of equity. This means that TCON has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of TCON which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at TCON, take a look at TCON’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further research:
- Historical Track Record: What has TCON’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on TRACON Pharmaceuticals’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.